Hilton Garden Inn owes city $700K in parking fees

Monday

Mar 4, 2013 at 10:44 AMMar 4, 2013 at 10:59 PM

By Nick Kotsopoulos TELEGRAM & GAZETTE STAFF

The owner of the Hilton Garden Inn has not paid more than $700,000 in parking fees it owes the city for use of the municipal garage on Major Taylor Boulevard. The owner says the city has not met its obligation to have a pedestrian bridge built connecting the downtown hotel with the DCU Center and the parking garage.

The matter has been brought to light by the city's outside auditor —Sullivan, Rogers & Company — as part of the annual audit it does on various facets of the municipal government.

In reviewing the operations of the city's off-street parking program, the audit found "several significant outstanding amounts "owed to the city, with the most prominent one by Hilton Garden Inn.

Republic Parking System, which manages the city's off-street parking operations, is responsible for billing and collection.

It reported that the Hilton Garden Inn owed the city $707,500 in unpaid parking fees as of last June 30, according to a management letter prepared by Sullivan, Rogers & Company as part of its audit of several different municipal operations for fiscal 2012.

Of that amount owed, $664,000 was more than 90 days old, the management letter said.

Meanwhile, the outside auditor also found that financial records maintained by the city identified a greater accounts receivable balance than what was reported by Republic.

The city's records showed that as of last June 30, the accounts receivable for the Hilton Garden Inn was $956,100, the management letter said.

City Manager Michael V. O'Brien said the findings of the outside auditor are specific to ongoing negotiations with the owner of the Hilton Garden Inn (Monarch Enterprises) and the city on the once-proposed pedestrian bridge.

"Monarch and the city are in negotiations/litigation," Mr. O'Brien wrote in an email. "Monarch believes this skybridge is a necessity and a city contractual obligation. Their use of the municipal parking garage is tracked to the dollar and these costs are due the city.

"We are aware they are holding these payments until we come to conclusion and closure on the once proposed skybridge," he added. "We will be working to bring this to conclusion in the near future and have the majority of these arrears to the Off-Street Parking Board addressed."

As part of the land disposition agreement the city reached with the developer of the Hilton Garden Inn in 2003, there was a provision that called for construction of elevated pedestrian walkways from the Major Taylor Boulevard parking garage to the hotel and from the hotel to the convention center portion of the DCU Center.

It was to be built through a public/private partnership — the agreement called for the state to pay for 50 percent of the cost through a Community Development Action Grant, while the city and the hotel developer would split the remaining 50 percent.

The hotel developer also entered into a separate parking agreement with the Worcester Redevelopment Authority, which built the Major Taylor Parking Garage, for the use of parking spaces in that garage.

The WRA agreed to reserve and dedicate 130 parking spaces in the garage for guests having business at the hotel, and it also agreed to keep available for reservation on a day-to-day basis an additional 170 spaces.

Mr. O'Brien said the city worked hard to bring the pedestrian bridge project in within a reasonable budget, but its high costs, combined with the national economic downturn, made it impossible to proceed with it.

The project's design called for a glass-enclosed, elevated walkway, 274 feet long and 10 feet wide, connecting the third level of the municipal 1,000-space parking garage on Major Taylor Boulevard, sloping to the second floor of the 200-room Hilton Garden Inn across the street, and rising again to hook up with the second floor of the DCU Center.

The bridge was to be supported by 13 pairs of cables radiating from the top of a signature 150-foot pylon located next to the hotel.

But Mr. O'Brien ended up pulling the plug on the pedestrian bridge project in 2007 because of skyrocketing increases in its overall costs. He said his decision was based on an analysis of competitive bids for the project.

The original project estimates, prepared before Mr. O'Brien's becoming city manager in March 2004, pegged the cost of the pedestrian bridge at about $2.5 million.

After publicly bidding the project three times, and with cuts in scope and value engineering, the lowest bids the city could get for the project came in at around $8 million, the manager said.

"We did our level best to make it an affordable – public/private venture," Mr. O'Brien said. "It turned into an unaffordable, $8 million dollar public venture. This was at a time when the world economy was teetering and we eventually fell into a great recession. The city had to look carefully at priorities in the midst of this economic chaos and the resultant significant municipal service cuts, layoffs and great city capital needs everywhere."

As a result, the city placed the pedestrian bridge on hold, and ,the city manager said, he briefed the hotel developer, the City Council and the community accordingly. He said he is hopeful the day will come when such a project can be funded.

"The world is a far different place since this was first proposed (in 2003) as a public/private partnership at $2.5 million," Mr. O'Brien said. "I must be realistic and, as always, fiscally responsible; an $8 million-plus skybridge (and now primarily a publicly-funded project) at this juncture in our history is unthinkable.